1. THE two complainants in this case seek appropriate reliefs in pursuance of the agreement dated 27.1.87 against the developers whose services were alleged to have been hired by the complainant for the purpose of constructing residential premises and delivering possession of the same and the opposite parties being guilty of deficiency in service.
2. THE case set up in the complaint filed on 5.7.93 is mat the complainants who were at that time in Libya and wanted to settle in India later, entered into an agreement dated 27.1.87 with M/s. Lata Construction (opposite party No. 1), represented by its partner Shri Vijay Shankar Kamat (opposite party No. 2) and opposite party Nos. 3 & 4 being the other partners. Under the said agreement, the opposite parties were to develop, construct and handover possession of flat No. AG -2 on the ground floor having an area of 670 sq.ft to the complainants, situated in a building named Madhusudan, on plot No. 138, T.P.S. II and C.T.S. No. 1166 and 1166(1) in Vile Parle, Bombay -400 057. The opposite parties had earlier entered into a development agreement on 9.12.85 with the owners in respect of the said property to develop, construct and to sell flats in the proposed building to be constructed on ownership basis. The complainant allege that on 27.1.87 as a consideration for the services of constructing and giving possession of the aforesaid flat the complainants paid to the opposite parties Rs. 3,38,000/ - in cash but without any receipt and Rs. 32,000/ - by cheque against receipt and in addition paid on various dates, as and when demanded by opposite parties, a further sum of Rs. 2,00,000/ - against receipts. It is further stated that the complainants when they came from Libya in June, 1988, offered to pay the balance payment to opposite party No. 2 and asked him to hand over the possession as the construction of the building was complete, but opposite party No. 2 refused to accept the payment and to hand over possession on the pleas that electricity, plumbing, tiling and fencing work was incomplete and the occupation certificate had not been received, but opposite party No. 2 assured the complainants that opposite parties would accept the remaining payment with the completion of the above said works and on obtaining occupation certificate possession would be handed over to the complainants.
The complainants further allege that when they came back in April, 1990 from Libya and visited the said building to observe the progress of the works, they were utterly shocked to see that the flat was locked from outside with the name plate of ''Indira Joshi''. On confronting opposite party No. 2 pleaded his inability to give immediate possession but asked for time to solve the problem with Indira Joshi who had taken the custody of flat AG -2, but opposite party No. 2 neglected or failed to give the precise natue of the problem despite repeated demands by the complainants. The complainants returned to Libya and came back to Bombay again in January, 1991 when they demanded the possession of the said flat from the opposite parties. It is alleged that the opposite parties indicated their inability to give possession of the said flat in compliance with the agreement dated 27.1.87 and suggested that opposite parties would instead like to pay the complainants a sum of Rs. 9,51,000/ - in three instalments on or before 30.5.91 and offered to enter into another agreement to this effect. According to the complainants, they had no alternative and they agreed and signed the agreement dated 23.2.91 but without prejudice to their rights and reliefs under the agreement dated 27.1.87. Despite the agreement dated 23.2.91,no payments have been made by opposite parties. The complainants then alleged that they have been forced to remain in India giving up lucrative professional prospects and income in Libya, just to pursue the matter personally with opposite party No. 2 as he was neither giving any positive response to complainant No. ls parents and brothers follows up nor complying with the conditions mentioned in the agreement dated 23.2.91 nor giving possession of the said flat to the complainants. As a result of the persistent follow up by the complainants the opposite party No. 2 is alleged to have agreed to sign another agreement with the complainants by which opposite parties were to make all payments by 31.12.92 failing which opposite party No. 2 was to hand over possession of the said flat and a draft agreement was prepared but opposite party No. 2 later refused to sign it.
3. IT is further alleged that the complainants filed a Police complaint against opposite party Nos. 2, 3 and 4 in response to which opposite party No. 2 was summoned at the Crime Branch where he was interrogated and later gave an undertaking in writing to the Police to give possession by 5th May, 1993 of an alternative accommodation in Vile Parle to the complainants, but the same has not been given. The complainants allege that they have been forced to stay with complainant No. ls parents in a small flat with their two children in conditions which are uncomfortable and cramped, that just because of the unscrupulous behaviour of opposite parties the complainants and their children have to endure physical and emotional strains and that the complainants have suffered loss of opportunity to practice their profession. The complainants state that the opposite parties have been guilty of negligent acts and deficiency in service within the meaning of Consumer Protection Act, 1986 and claim for a direction to the opposite parties for rectification in deficiency in service by giving the complainants possession of Flat No. AG -2 in Madhusudan Building or to pay Rs. 26.8 lakhs the then current price of the flat with 18% interest per annum besides compensation of Rs. 1.00 lakh, Rs. 10,000/ - as actual expenses incurred and Rs. 30,000/ - as costs of litigation.
4. IN response to the notice issued by this Commission, the opposite parties have put in appearance and filed the written statement. The first preliminary objection taken is that the complaint is hopelessly barred by time as per the provisions of the Limitation Act as well as under Section 24A of Consumer Protection Act, 1986 as amended w.e.f. 18.6.93, both under the agreement dated 27.1.87 and subsequent agreement dated 23.2.91. The second objection is that the complaint raises questions of fact which would require voluminous documentary evidence and interpretation of the said agreements and other documents and therefore, the matter cannot be tried before this Commission wherein the matters are decided by summary trial. The third preliminary objection is that the transaction under the agreement dated 23.2.91 being monetary transaction, there is no question of deficiency in service so as to entitle the complainants to file the present complaint under the provisions of Consumer Protection Act.
On merits it is admitted that opposite party No. 1 is a registered partnership firm with opposite party Nos. 2, 3 & 4 being its partners, engaged in the business of developing plots of land, constructing residential premises on them and selling them. It is also admitted that the owners in respect of property bearing final Plot No. 138 TPSII, CTS1166 and 1161(1), admeasuring 796 sq. yards entered into Development Agreement dated 9.12.85 in favour of the opposite parties for development of the said plot, construction of flats on the said plot after preparing plans and specifications and getting sanctions from Bombay Municipal Corporation, but the copy of the said agreement dated 9.12.85 has not been filed by the opposite parties. It is also admitted that the complainants decided to purchase a flat and entered into the agreement dated 27.1.87 with opposite party No. 1 and opposite party No. 1 had agreed to hand over possession of flat No. AG -2 to the complainants in the building named Madhusudan on Plot No. 138, TPSII and C.T.S. 1166 & 166(1) in Vile Parle, Bombay pursuant to the agreement dated 7.1.87. The opposite party admit the payment of Rs. 32,000/ - by cheque on 27.1.87 but denied the alleged payment in each of Rs. 3,38,000/ -. They also admit the payments aggregating to Rs. 2,00,000/ - as per receipts as reflected in Exhibit 3 of the complaint.
5. IT is apposite to reproduce in extenso the case of the opposite party as set out in paragraph 14 of their version :
''The opposite parties state and submit that in or about June -July 1988 the opposite parties had pleaded their inability to hand over the possession of the said flat to the complainants under the circumstances beyond their control. In this connection, the opposite parties state and submit pursuant to the development agreement dated 9.12.85 executed by Kumari Indira Mahadeo Joshi and others in favour of the opposite parties No. 2, the opposite party No. 1, their partners, agreed to develop their plot of land on consideration and out of 13 flats constructed in the said building, 7 flats will be handed over to the said coowners. Further some of the co -owners represented to the partner of opposite parties No. 2 that they are not interested in retaining the said flat and requested him to dispose of even their respective said flats and out of said 7 flats, the 4 flats were disposed of as per the instructions of the owners to respective flat purchasers. Similarly Mrs. Indira Joshi one of the co -owners had also represented to the opposite party No. 2 to dispose of her flat. Pursuant to the said representation the opposite party No. 2 agreed to sell the said flat in favour of the complainant above named and entered into an agreement dated 27.1.87. However, in or about June, 1988 the said Mrs. Indira Joshi backed out from her oral commitment and insisted that she wanted the possession of the said flat. Under the circumstances there was no flat at the disposal of the opposite party No. 2 to be handed over to the complainants. Under the said circumstances the opposite party No. 2 informed the complainants about his inability to provide flat in the said Madhusudan building to the complainants and offered to refund the entire consideration received by him until that date. During the relevant time the another scheme of opposite party No. 1 was under construction in Jogeshwari and the opposite party No. 2 had offered to accommodate the complainants in the said scheme. In fact the flat admeasuring about 600sq. ft. was shown to the complainant and opposite party No. 2 had offered to refund the balance amount. However the complainant was adamant and not willing to accept the flat of 600 sq. ft. and he wanted the flat admeasuring about 680 sq. ft. Since the plans in the new schemes were already sanctioned it was beyond the control of the opposite party No. 2 to offer flat admeasuring 680 sq. ft. to the complainant and therefore he had offered to refund the entire money at that stage. Apart from that the opposite party No. 1 had shown his willingness to offer another premises within the said vicinity of the said scheme but the complainant did not accept the same and demanded the exorbitant compensation. Between 1988 till 1990 the various flats were show to the complainant but complainants did not finalise any transaction and was adamant of having the flat admeasuring 670 sq. ft. that too in Madhusudan Building.''
6. IT is further stated that in or about last week of February, 1991 the complainant No. 2 alongwith local anti -social elements one of them was one Sham Upadhyaya a nefarious antisocial element from the locality came to the residence of the opposite party No. 2 and by force obtained the signatures of the opposite party No. 2 on the alleged agreement dated 23.2.91. The opposite parties stated and submitted that they had no intention whatsoever to pay Rs. 9,51,000/ - as reflected in the said agreement by 30th April, 1991.
It is further admitted that on 7.2.93 the complainants filed a Police complaint against opposite party Nos. 2, 3 and 4 in response to which opposite party No. 2 had been summoned by the Crime Branch, Bombay. The opposite parties, however, denied that they were interrogated or opposite party No. 2 gave undertaking to the Police that he would by 5th May, 1993 hand over the possession of the alternative accommodation in Vile Parle area to the complainants. It is, however, averred that the concerned Inspector Shri Samuel used his good offices to put an end to the entire dispute and requested the opposite party No. 2 to refund the principal amount together with interest on the said amount and that under the said circumstances without prejudice to the rights and contentions of the parties, the opposite party No. 2 orally agreed to pay Rs. 6,70,000/ - being the principal and interest thereon. The opposite parties however, denied that they are guilty of any deficiency of service or of any negligent act within the meaning of Consumer Protection Act to entitle the complainants to invoke the jurisdiction of this commission for the grant of relief prayed for or any other relief.
7. THE parties have not led any oral evidence and have relied on their affidavits in support of their respective versions and the admitted documents on record, mainly the agreement dated 27.1.87 and the agreement dated 23.2.91. The second preliminary objection that the complaint raises questions of fact which would require voluminous documentary evidence is stated to be rejected.
8. THE question whether housing construction or building activity carried by a private or statutory body is service within the meaning of Clause (o) of Section 2 of the Act is settled by the Supreme Court in ''Lucknow Development Authority v. M.K. Gupta, III (1993) CPJ 7 (SC)=1994 (1) SCC 242. Construction of a flat or house is for the benefit of the person for whom it is constructed. He may do it himself or hire the services of a builder or contractor. The later being for consideration is service as defined in the Act. The opposite party No. 1 is a registered partnership firm engaged in the business of developing plots of land, constructing residential premises on them and selling them. The agreement dated 27.1.87, Exhibit 2, between the parties records this fact as also the obligation of the opposite parties to prepare plans and specification, to obtain the sanction of the Bombay Municipal Corporation, to construct and complete construction of the building in accordance with the approved plans and to give possession of flat AG -2 on the ground floor of the said building having an area of 670 sq.ft. The funds for the construction are provided by the complainants as also the other pruchasers of the flat on instalment basis with the progress of the construction as set out in para 4 of the said agreement dated 23.1.87. The opposite party had to give occupation of the said flat to the complainants on the completion of the building and on getting the occupation certificate, besides the formation of a Cooperative Housing Society or any other organisation that may be formed by the flat owners as per Clause (9) of the said agreement dated 23.1.87 on the completion of the building. As per Clause 10 the builder was expected to deliver possession on or before December, 1987 subject to certain exceptions when time was deemed to be extended. The opposite parties had undertaken to erect the flat and it is inherent that they shall perform all obligations as agreed to. When possession of the flat is not delivered within the stipulated period the delay so caused is denial of service. Such dispute is not in respect of the sale of immovable property, but deficiency in rendering of service within the scope and ambit of the Consumer Protection Act.
The question of limitation need not detain us particularly on the facts of this case. As already noticed the builder expected to deliver possession of the flat on or before December, 1987 provided the flat purchaser complied with all the terms and conditions and covenants of the agreement. The time mentioned above for delivery of possession was subject, however, to the easy availability of the materials like cement, iron, etc. at proper time to enable the builder to complete the building failing which the date of handing over possession was deemed to be extended. It is not clear from the record as to when the building was completed in all respects. According to the opposite parties they got occupation certificate some time in August, 1989 in respect of the said building Madhusudan and handed over possession of the flats to the coowners including Indira Joshi of Flat No. AG -2 and to the other flat purchasers. The possession of the flat AG -2 could not be delivered even to the complainants in the absence of the Occupation Certificate and, thus it is the delay after August, 1989 that is caused is deficiency in service and which gave a cause of action to the complainants. We have referred to earlier in their own words the stand of opposite parties in para 15 of the written statement that due to the circumstances alleged to be beyond their control the opposite parties between 1988 to 1990 showed various flats to the complainants but the complainants did not finalise any transaction and were adamant of having the flat admeasuring 670 sq.ft. and that too in Madhusudan Building. Therefore, till the end of 1990 the opposite parties were offering in lieu the possession of the alternative flat. An agreement for termination of the agreement dated 27.1.87 was entered into on 23.2.91. The execution of this agreement is admitted by the opposite parties who allege force or undue influence for which they have not led independent evidence : Persons do not execute documents without intending them to be valid and binding on them. It is pertinent to note that the opposite parties have admitted the execution of the agreement dated 23.2.91, its terms and raised the question of the internal dispute between the developers and Kumari Indira Joshi for offering to settle the dispute. The complainants agreed to various terms and conditions without prejudice to their rights and reliefs under the said agreement dated 27.1.87 and this is specifically recorded in Clause 5 of the agreement dated 23.2.91 that, ''the purchasers shall have lien on the said flat in particular and the property in general till the full payment is made by them as aforesaid or the possession of the said flat coming to their hands in case of default as aforesaid provided, however, if the Developers have paid to the Purchasers the full payment as stipulated hereinabove the agreement dated 27th January, 1987 entered into by and between the parties shall stand determined terminated and revoked in all respect.'' The opposite parties agreed to pay Rs. 9,51,000/ - in three instalments, Rs. 3,00,000/ - on or before 20.3.91, Rs. 3,00,000/ - on or before 20th April, 1991 and Rs. 3,151,000/ - lakhs on or before 30th May, 1991, admittedly not one single instalment was paid.
9. THEREFORE , the right of the complainants to be delivered possession of the said flat did not get extinguished by the agreement dated 23.2.91 and the agreement dated 27.1.87 remained in full force. The complainants are entitled to be delivered the possession of the said flat, after August, 1989 when the occupation certificate was obtained and again reiterated in the agreement dated 23rd February, 1991, but not delivered. Thus the cause of action is a continuing one. The complainants admittedly filed on 7.2.93 a Police complaint and the opposite party No. 2 was summoned by the Crime Branch. According to the complainants the opposite parties agreed and gave an undertaking to the police that they would by 5.5.93 hand over possession of alternative accommodation in Vile Parle area to the complainants. According to the opposite parties they ''orally agreed to pay Rs. 6,70,000/ - being the principal and the interest thereon, however, the complainant No. 1 did not accept the offer''. The opposite parties have acknowledged their liability to deliver possession of the said flat on 23rd February, 1991 within two years from August, 1989 when the occupation certificate of the building was obtained and again on 7th February, 1993 when they offered to pay Rs. 6,70,000/ - being the principal amount plus interest thereon. In law the complainants are entitled to be delivered the possession of the flat and thus the cause of action is a continuing one. The complaint in these facts filed on 5.7.93 cannot be considered as stale or barred by Section 24A of Consumer Protection Act and we hold it as within limitation.
10. THE opposite parties cannot be heard to say that they have no authority from the owner to sell the said Flat AG -2 on ownership basis. In the agreement dated 27.1.87, Exhibit 2 it is clearly recorded :
''And whereas the Builders herein have been further permitted under the same Agreement to sell flats in the proposed building to be constructed as per the said agreement dated 9th December, 1985 on what is popularly known as ownership basis. And whereas the Builders being thus entitled to construct the building, are constructing or have constructed the building consisting of ground and 2 floors as per the plans and specifications sanctioned by the Bombay Municipal Corporation under 1OD No. CE/839/BSW/AK dated 29.4.86 and are entitled to sell the flats therein on ownership basis as aforementioned subject however, to the terms and conditions set out in the aforesaid Agreement dated 9th December, 1985.''
As already noticed the complainants had hired the services of the opposite parties for consideration and the opposite parties have been negligent in not delivering possession of the said flat in August, 1989 when occupation certificate was obtained. There is thus a clear deficiency in service. The fact, however, is that the builder has delivered in August, 1989 the possession of the said flat No. AG -2 to Indira Joshi. The complainants have themselves stated that they found in April, 1990 that the possession of the said flat was with Indira Joshi but she has not been made as a party respondent in this case. It will not be fair to grant any relief to the complainant which would prejudicially effect her right, title and interest. The complainants can only be granted compensation.
11. AS the Supreme Court held in Lucknow Development Authoritys case (supra) the word compensation is of very wide connotation. In legal sense it may constitute actual loss or expected loss and may extend to physical, mental or even emotional suffering, insult or injury or loss. According to the complainants due to inflation the price of equivalent flat of 670 sq. ft at Rs. 4,000/ - in the same locality at Vile Parle works out to Rs. 26.8 lakhs minimum and this is what has been claimed as compensation in the complaint. The complainants have, however, not furnished any material, proof or evidence of the market price of the equivalent flat in Vile Parle despite the denial by the opposite parties that the present market value of the said flat is Rs. 4,000/ - per sq. ft. in Vile Parle locality. The only evidence on record is the agreement dated 23.2.91, Exhibit 4, in which the developers agreed to pay Rs. 9,51,000/ - for the purpose of treating the agreement dated 27.1.87 to be terminated on full payment. The complainant had agreed to treat the said agreement dated 27.1.87 as terminated on the full payment. There is some rational basis for the figure of Rs. 9,51,000/ - arrived at on 23.2.91. The complainants admittedly paid a sum of Rs. 32,000/ - on 27.1.1987 and another sum of Rs. 1,50,000/ - on various dates upto July 1987 and a sum Rs. 50,000/ - on 11.4.88 as per Exhibit 3 (collectively). The complainants claimed another payment in cash on 27.1.87 of Rs. 3,38,000/ -. The opposite parties had offered to refund amount received with interest (the normal current rate is 18% per annum) and if interest is calculated on the amount of Rs. 5,60,000/ - at the rate of 18% per annum from the dates the payments were made and received by the opposite parties the figure comes to roughly over Rs. 9,51,000/ -. The opposite parties had agreed to pay to the complainant Rs. 9,51,000/ - for the purpose of treating the agreement dated 27.1.87 as terminated on full payment; obviously the refund of the amount with interest or it may be that it represented the cost of alternative flat. It can, therefore, be reasonably inferred that the refund with interest or the fair market price of the said flat at that time was assessed by the parties at Rs. 9,51,000/ - which figure can form the foundation of giving compensation to the complainants with interest @ 18% per annum w.e.f. 23.2.91 to cover the increase in the price of the flats upto the date of the complaint and thereafter till payment.
12. IT is the natural desire of every Indian to acquire flat or at least a roof over his head. The failure of the opposite parties in handing over possession of the said flat must have caused pain and suffering to the complainants for a long period. They have claimed a modest compensation to the extent of Rs. 1.00 lakh which is reasonable and is hereby awarded.
There is no evidence on record or any particulars or vouchers of the actual expenses of Rs. 10,000/ - incurred by the complainants in their follow -up with opposite parties and hence this part of the claim is disallowed as not substantiated.
13. IN the result, the complaint is allowed and the complainants are granted the following reliefs against the opposite parties, jointly and severally :
1. Compensation of Rs. 9,51,000/ - with interest at the rate of 18% per annum w.e.f. 23.2.91 till the date of this order which comes to Rs. 8,13,105/ - with future interest @ 18% till payment/ realisation of payment. 2. Compensation of Rs. 1.00 lakh on account of pain and suffering, and 3. Rs. 10,000/ - as assessed costs of the proceedings before this Commission.
14. THE opposite parties are directed to comply with the orders of this Commission and make the payments of the aforesaid amounts within one month failing which liberty is reserved to the complainants to invoke the provisions of Section 27 of the said Act for enforcement of execution of the orders. Petition allowed.
